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Insights into a Successful Consumer Loyalty Program

September 9, 2016

Insights into a Successful Consumer Loyalty Program

“Not another one…” (snooze fest), “Haven’t we got enough of those already?” and “Blow me down with a feather” were just some of the reactions I got from my colleagues when I announced my next blog will be about loyalty programs.

It is a topic that is constantly in the spotlight – rigorously researched, widely written about and tirelessly talked about. But despite the brains and money that have gone into loyalty programs, many still question their worth. This is easy to understand given the resources invested and the constantly growing list of loyalty program fails.

The recent Woolworths debacle is of course the latest loyalty program in question, with the supermarket giant last week unveiling the third version of its program in less than 12 months. Ingrid Maes, Woolworths’ Director of Loyalty and Customer Data, released the following statement:

“We are pleased that our members have responded positively to automatically getting money off their shopping. However, we’ve acknowledged that we didn’t deliver enough orange ticket offers in-store and while many of our members have been rewarded well, too many have not.”

This failure is in stark contrast to the love for the Country Road loyalty program we discovered and marvelled at in our recent research for the brand. So how has Country Road succeeded where so many others have failed?

  • Instant gratification – the spend and save promotion means customers receive immediate discount at the time of the purchase, while encouraging them to spend more in order to receive a higher discount.
  • Something to gain and lose – a tiered program serves as aspiration to spend more and progress up the tiers to become a VIP, while the prospect of losing status is an even more powerful incentive to keep buying.
  • Exclusivity – the tiered structure also heightens perceptions of exclusivity by appealing to customers’ egos, while also delivering functional benefits such as sale previews, additional discounts and free delivery.
  • Just because – birthday, welcome, and anniversary vouchers ensure customers are rewarded regardless of how much they spend, adding a touch of generosity to the program.

While many rewards programs incorporate these themes into their structure, none seem to be as generous as the Country Road program. This, coupled with a brand that is strongly entrenched in consumers’ lives, means the Country Road program successfully drives customer loyalty and rewards customers for that loyalty – exactly what a loyalty program should be doing!

Written by Selma


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